Life as an expatriate can be exciting and a true adventure – but that’s not to say it’s straightforward. That is particularly true for Aussie expats from a tax perspective, as it can be difficult to know exactly what to do to seamlessly hop between two complex tax systems.
So let’s go through some common tax questions for Aussie expats with some clear answers.
Q: I’ve lived outside of Australia for more than five years, but now I’m returning. How do I declare my income on an Australian tax return?
A: You are almost certainly now regarded as an Australian non-resident, so income you earned overseas is not taxable in Australia. Once you become a tax resident again, you’ll need to include your worldwide income in your Australian return. Prior to returning home though, we highly recommend that you take care and seek professional advice as there’s a few curly issues that can come back to bite you if you don’t plan your return carefully!
Q: I’ve just moved to a new country to work for a few years. Can I move my Australian super to a new pension fund in my new country?
A: As the Australian tax rules stand today, the quick answer is no – unless your new country is New Zealand. Otherwise, you will need to wait until retirement age.
Q: I left Australia but I remained an Australian home owner. I’m now thinking of selling my property, so will I be liable for Capital Gains Tax?
A: If you rented out your main residence, you have six years to sell it without being liable for Capital Gains Tax. But if you bought a new main residence somewhere else in the world, you will have to pay CGT.
Q: I’m an Australian citizen, but I want to buy an investment property in my new country of residence. Do I need to report anything for Australian tax purposes?
A: The Australian system basically regards foreign investment properties in the same way as Australian investment properties, for tax purposes. If the property earns income, it will generally be subject to tax in the country it is in, but if you’re an Australian tax resident, it will also need to be included in your Australian return. If you’ve paid tax in that other country on that same rental income, you’ll also be eligible for a tax credit in your Australian return so that no double-taxation occurs. This can be a tricky subject, so it might be a good idea to get some professional advice.
Q: I’m living overseas, but I want to send a lump sum back to an Australian bank account – will I have to pay tax on it?
A: Probably not, because it’s likely you are no longer regarded as an Australian tax resident. But if you sold assets in your new country that were converted to cash, there will most likely be a tax liability in the country where you sold them. Again, taxation can be complicated, so it’s always a good idea to seek some advice before doing so.
Need more assistance with common expat tax FAQs? Contact us today to make sure everything’s clear so you can be left to enjoy your new adventures abroad, tax worry-free.